The Effect and Policy Implications of Heuristics Acting Upon Unemployment

Abstract

This paper examines how unemployment is lengthened  through the availability heuristic, status quo bias, and framing effect affecting unemployed, employers, and culture, as well as how it leaves lasting effects on individuals and the economy. These effects include but are not limited to mental health issues due to loss of the status quo, employment bias, and stress buildup due to the framing of information. These heuristics, however, can be combated through policy and initiatives such as UI benefits, job training, and awareness training of employers and the general population in order to increase general economic stability, improve the health of the people, and decrease unemployment duration while minimizing the need for trade-offs.